Florida Citrus Mutual Triangle Column – May 22, 2020

By Ned Hancock, Chairman of the Florida Citrus Commission

This week the Florida Citrus Commission held its first ever virtual commission meeting. Commissioners appeared via video from each of our respective locations as Department of Citrus staff and partner agencies presented from theirs. We covered big items: budget, potential tax rates, use of fund balance, the Florida Citrus Outlook, future marketing plans and scientific research. Discussion was lively and engaging.

While I look forward to a time when we can all meet in the same room again, it is good to know that, although the world has changed, it hasn’t stopped us.

In fact, this is a pivotal time for the Florida Citrus industry.

In the four-week period ending May 9, average year-over-year sales of total OJ increased 31 percent with 38.38 million equivalent gallons sold, according to the latest Nielsen Retail sales report. Sales of NFC OJ increased by nearly 31 percent for the period. Additionally, total OJ sales for the season beginning October 2019 are up by nearly 9 percent with 274.4 million equivalent gallons sold. Total grapefruit juice sales were up by 11 percent for the season with total sales of 7.3 million equivalent gallons sold so far this season.

However, despite increased consumer demand for fresh and processed citrus, growers can continue to expect reduced profitability this season due to higher production costs and suppressed grower prices for uncommitted fruit, according to a special May update of the Outlook shared by Dr. Marisa Zansler.

We are hopeful this will change as we head into a new season with lower inventories of NFC OJ, but more needs to be known about the impact of COVID-19 on consumer demand.

As COVID-19 concerns escalated in the U.S., FDOC’s Economic and Market Research Department implemented additional questions as part of its OJ Consumer Tracker to measure the corresponding changes in consumer behavior due to the pandemic.

Results indicate 42 percent of consumers who purchased more 100% orange juice in response to COVID-19 concerns in April did so because they were aware that OJ has vitamin C and supports a healthy immune system. And 60 percent of those surveyed who had also reported seeing any type of media regarding 100% orange juice in the past 30 days purchased more to due to COVID-19 concerns, illustrating the importance of consumer awareness of the positive attributes of orange juice over time. 

Jackie Hopkins, with partner agency Edible, showcased how current marketing programs aimed at driving sales of 100% orange juice are continuing to perform well. Since its launch in January, the program has driven more than $3.51 million in attributed sales of 100% orange juice, reached 249 million impressions and provided a Return On Ad Spend (ROAS) of $4.35.

Hopkins also shared what programs at different tax rates could look like for 2020-21 with increased budgets equaling a broader and more diverse target audience in order to maximize consumer reach.

Other highlights of the meeting included a presentation by Dr. Christa Court, with the University of Florida IFAS, on preliminary results of the 2018-19 economic contributions of the Florida Citrus industry. Her report shows that our industry supports more than 40,000 job and has an economic impact of $7.45 billion to the state.

Dr. Rosa Walsh also shared recently published FDOC-sponsored research on consumption of 100% orange juice in adults and children that further supports messaging used in marketing and outreach to health professionals. The research shows orange juice consumption is associated with benefits to nutrient intakes and diet quality without detriment to body weight in children and has favorable effects on BMI and waist circumference in adults.

However, much of the discussion during the meeting centered around a potential tax rate and whether going ahead with a planned spend down of fund balance is appropriate right now given the many unknowns ahead of us.

Ultimately, the Commissioners asked FDOC staff to return in June with several budget scenarios for processed orange. Those scenarios include:

  • $.07 tax rate with planned spend down of fund balance
  • $.12 tax rate with planned spend down of fund balance
  • $.12 tax rate with no spend down of fund balance
  • $.15 tax rate with no spend down of fund balance

We may not know what the future holds but we do know that we have to keep fighting. I look forward to reuniting with my fellow Commissioners on June 17 to discuss how we will proceed.

In the meantime, the FDOC invites you to attend a webinar on May 28 at 11 a.m. focused on consumer insights and behaviors related to COVID-19. Details are available here.

If you were unable to attend the May 20 FCC meeting, it is available for viewing here.